The governance model of prediction market platforms faces an interesting paradox. Looking at the leading platforms currently, it becomes clear—Polymarket and Kalshi both adopt a centralized topic creation mechanism, where users need to submit an application form, and after official review, staff can create markets, including the settlement rules which are also designed by the platform.

The benefits of this process are quite clear: quality is controllable, and disputes are minimized. But the problem arises—if the platform truly opens up to everyone to freely create topics, which seems more decentralized, it could actually trigger a series of difficult-to-handle issues—such as ambiguity in topic definitions, disputes over settlement standards, and the proliferation of malicious markets. The platform’s trade-off between centralized control and open freedom essentially reflects the governance dilemma currently faced in the prediction market sector.